We would like to inform you that pursuant to the International Business Companies (Amendment) Act 2021 enacted in August 2021 and the International Business Companies Act and Other Related Laws (Amendment) Act 2021 enacted in December 2021 (together the Amendments), various legislative amendments to the International Business Companies Act 2016 (the Act) came into force on 1 January 2022 (unless otherwise indicated below).
NEW ACCOUNTING RECORD REQUIREMENTS – REMINDER
1.1 For many years a Seychelles company could keep its accounting records outside Seychelles, provided the directors kept the company’s registered agent notified of the address where the records were kept. That requirement still applies, but in addition – adopted at the insistence of the OECD – as from 6 February 2022 every Seychelles company is required to send a copy of their accounting records twice annually to be kept at its registered office in Seychelles (section 175(1A) and (1B) of the Act). The FSA’s Guidance Circular indicates that the following shall apply:
1.2 While copies of a company’s accounting records are required to be kept at the registered office in Seychelles, they are not required to be filed with the Registrar and are not open to public inspection.
What are accounting records?
1.3 Accounting records mean documents in respect of a company’s assets and liabilities, the receipts and expenditure of the company and the sales, purchases and other transactions to which the company is a party (e.g., bank statements, receipts, title documents, agreements, vouchers, etc). Examples:
Are annual accounts accounting records?
1.4 If annual accounts (audited or unaudited) have in fact been prepared for a Seychelles company and thus exist, then they are part of the company’s accounting records. If annual accounts have not been prepared, there is no Seychelles requirement for the company to prepare or file annual accounts - except for a large company or an active company that is not a holding company (see annual financial summary requirement below) or unless it earns assessable Seychelles-sourced income.
Annual financial summary (short-form annual accounts)
1.5 The annual financial summary requirement only applies for: (i) large companies and (ii) non-large non-holding companies. Large company is defined in the legislation as a company which meets the annual turnover threshold specified for a “large business” under the Revenue Administration Act, namely Seychelles Rupees 50,000,000 (approx. US$3,700,000 as at 4 January 2022). Holding company means company with no trade or business operations of its own but holding interests in other companies or assets.
1.6 With effect from 6 February 2022, a large company (i.e. with an annual turnover above Seychelles Rupees 50,000,000) or a non-large company that is not a holding company (i.e. not a company which only holds interests in other companies or assets), is required to prepare an annual financial summary (management accounts) to be kept at its registered office in Seychelles within 6 months from the end of the company’s financial year (section 175(1B) of the Act). The financial year of a company shall be the calendar year, unless it is changed by a resolution of directors and notified to the Company’s registered agent within 14 days of the passing of the resolution (section 175(1C) of the Act).
1.7 For companies that already prepare annual financial statements (audited or unaudited), these will suffice to comply with the annual financial summary requirement, provided the annual accounts are sent to the registered agent in Seychelles for keeping at the company’s registered office.